Taxpayer in Constructive Receipt of Income Even Though No Attempt to Access Funds in Current Year.

The decedent utilized the cash basis of accounting and held stock in a company for which she held the stock certificates in her possession.  In late 2006, the company merged with another company and the decedent became entitled to $51/share with her stock then being canceled.  Under the merger agreement, the company deposited the decedent's funds with a paying agent, entitling the decedent to receive over $1 million as of the date of the deposit - Nov. 20, 2006.  The decedent could collect the funds by surrendering the stock certificates.  The decedent (or her daughter who was the decedent's agent under a duly executed power of attorney) took no action to receive the funds before the decedent's death on March 29, 2007.  In late 2007, some stock certificates were surrendered and the account funds were placed in the account of the decedent's estate on January 8, 2008.  In early 2009, the estate completed the procedure for receiving the balance of the account funds attributable to the stock certificates that could not be located with the balance of the account funds paid out in late 2009.  The company issued Form 1099 that indicated that the decedent received the full account balance in 2006, and the amount was initially reported on the decedent's 2006 return.  Also, the decedent's estate reported the full account balance on it's 2006 return, but then later sought a refund.  The IRS denied the refund, and the court upheld the denial.  Santangelo v. United States, No. 3:12CV71DPJ-FKB, 2014 U.S. Dist. LEXIS 36114 (S.D. Miss. Mar. 19, 2014).